Hi Jaema and all,
At my branch of the Capital Area District Libraries, our DVDs are housed in two different areas. In one area, aimed at adults and teens, the movies are divided by genre (Mystery, Informational, Musicals, etc.). We have a separate section of DVDs in the children's area, and that section is divided into "Children's" and "Family." "Children's" is educational DVDs as well as movies that are really aimed at young children. "Family" is feature-length movies, animated or live action, that are aimed mainly at kids but that parents hopefully won't mind watching. As a rule of thumb, G-rated movies go in Children's and PG movies go in Family.
Occasionally patrons search for a family movie in the adult/teen area and are surprised not to find it, but overall the system seems to work very well.
Hope that's helpful,
Emma